On Friday, April 26, the Illinois House Labor & Commerce Committee held a subject matter hearing on “Workforce Development, Reducing Unemployment, and Improving the Economy.” Frank Manzo IV, MPP, Policy Director of the Illinois Economic Policy Institute (ILEPI) testified before the committee. Here is what he said.
Click here to read the full testimony on education, infrastructure, and registered apprenticeship programs.
Good morning, Mr. Chairman and Members of the Committee. My name is Frank Manzo IV. I am the Policy Director of the Illinois Economic Policy Institute, a nonprofit research organization that provides candid and dynamic analyses on major subjects affecting the Illinois economy.
Economic research finds that investing in infrastructure and education are the most effective public policies at boosting employment and growing the economy. In Illinois, for instance, every $1 billion invested in roads and bridges creates nearly 11,000 jobs and boosts the economy by about $1.6 billion. Education also raises wages and builds the foundation for economic prosperity. Researchers at Northwestern University and other universities have found that a 10 percent increase in spending on public education statistically reduces poverty by 4 percent.
Two reports that I co-authored with Professor Robert Bruno from the University of Illinois reach the same conclusions. We looked at 24 different policies– ranging from minimum wage to corporate tax incentives– and found that just four directly raise the employment rate: investing in higher education, in early childhood education, in highways, and in public transit. We find that these policies– along with strong enforcement of anti-discrimination laws– are also associated with lower African American unemployment rates in urban communities.
With regard to education, however, we know that college isn’t for everyone. In fact, for many young people, enrolling in a registered apprenticeship program is a better option than attending college. That’s why the number of active apprentices in Illinois has increased by 34 percent since 2011.
Registered apprenticeships are training programs that offer both on-the-job training and certified classroom instruction to workers so that Illinois businesses have access to a pool of skilled, productive workers. Participating apprentices get the opportunity to “earn while they learn” with minimal or no out-of-pocket costs.
Academic research finds that apprenticeship programs are successful at transitioning young workers into stable jobs and lowering youth unemployment. Participants in registered apprenticeship programs also earn about $124,000 more over their careers than non-participants. In Illinois, apprenticeships are particularly important to the construction industry, which operates the largest privately-financed system of higher education in the state.
Another 2016 study that I co-authored with the University of Illinois revealed the substantial value that construction apprenticeship programs provide in Illinois. We found that these programs directly create 5,000 total jobs, including 3,000 for instructors and program staff. They boost the economy by $1.2 billion per year. In addition, the average boost to a construction worker’s income if he or she goes through an apprenticeship program is greater than the impact of having an associate’s degree and even many bachelor’s degrees, such as social work and psychology. The point is that, while university education pays, so does completing a registered apprenticeship.
It is worth noting, however, that there are big differences between joint labor-management programs and non-joint, nonunion programs. Joint labor-management programs train 98 percent of all active construction apprentices in Illinois. In these joint union programs, 31 percent of all apprentices are women and people of color, compared to just 28 percent for nonunion programs. While efforts must be made to further diversify the industry, registered apprenticeship programs are a proven way to lift all blue-collar workers out of poverty and into the middle class.
In conclusion, the research is clear and consistent. Investing in education and infrastructure are the two most effective ways to boost employment and the economy. But not all people are able or willing to go to college. For many, the path to the middle class is through registered apprenticeships. Registered apprenticeship programs improve worker skills, raise wages, reduce unemployment, and grow the Illinois economy.
I thank you for allowing me the opportunity to submit my testimony.